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A.M. Best Downgrades Credit Ratings of Members of GuideOne Insurance Companies
[December 07, 2017]

A.M. Best Downgrades Credit Ratings of Members of GuideOne Insurance Companies


A.M. Best has downgraded the Financial Strength Rating (FSR) to A- (Excellent) from A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to "a-" from "a" of GuideOne Mutual Insurance Company (West Des Moines, IA) and its wholly owned subsidiaries: GuideOne Specialty Mutual Insurance Company, GuideOne America Insurance Company, GuideOne Elite Insurance Company, GuideOne National Insurance Company, and GuideOne Property & Casualty Insurance Company (collectively referred to as GuideOne Insurance Companies) (GuideOne). The outlook of these Credit Ratings (ratings) is negative. All companies are domiciled in West Des Moines, IA.

The rating downgrades reflect a material downturn in GuideOne's operating results during the first half of 2017, resulting in material losses in capitalization and substantial adverse reserve development relative to surplus. The negative results are attributable to significant losses in the For Profit Senior Living Center segment and excessive property catastrophe-related losses.

Conversely, GuideOne's ratings reflect the group's new senior management team's focus on actions to stabilize near-term capital and reduce volatility in operating results, with a long-term strategic shift to facilitate profitable growth. As of third-quarter 2017, the new senior management team executed measures to address volatility, including exiting the For Profit Senior Living Center segment, placing adverse development cover reinsurance to mitigate futre volatility and closing claims and underwriting leakage to address catastrophe weather issues.

Negative rating action could happen if GuideOne were to incur further material losses to their risk-adjusted capitalization, or if there were substantial adverse reserve development relative to surplus. Negative rating action also could occur if the group was unable to contain volatility under their current set of enterprise risk management measures.

This press release relates to Credit Ratings that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best's Credit Ratings. For information on the proper media use of Best's Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating Action Press Releases.


A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.


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